Regions of rDNA are commonly used to infer phylogenetic relationships among fungal species and as DNA barcodes for identification. These regions occur in large tandem arrays, and concerted evolution is believed to reduce intragenomic variation among copies within these arrays, although some variation still might exist. Phylogenetic studies typically use consensus sequencing, which effectively conceals most intragenomic variation, but cloned sequences containing intragenomic variation are becoming prevalent in DNA databases. To understand effects of using cloned rDNA sequences in phylogenetic analyses we amplified and cloned the ITS region from pure cultures of six Laetiporus species and one Wolfiporia species (Basidiomycota, Polyporales). An average of 66 clones were selected randomly and sequenced from 21 cultures, producing a total of 1399 interpretable sequences. Significant variation (≥ 5% variation in sequence similarity) was observed among ITS copies within six cultures from three species clades (L. cincinnatus, L. sp. clade J, and Wolfiporia dilatohypha) and phylogenetic analyses with the cloned sequences produced different trees relative to analyses with consensus sequences. Cloned sequences from L. cincinnatus fell into more than one species clade and numerous cloned L. cincinnatus sequences fell into entirely new clades, which if analyzed on their own most likely would be recognized as "undescribed" or "novel" taxa. The use of a 95% cut off for defining operational taxonomic units (OTUs) produced seven Laetiporus OTUs with consensus ITS sequences and 20 OTUs with cloned ITS sequences. The use of cloned rDNA sequences might be problematic in fungal phylogenetic analyses, as well as in fungal bar-coding initiatives and efforts to detect fungal pathogens in environmental samples.